LNG

NewMed Energy, the Israeli company with stakes in the East Mediterranean gas fields like Leviathan offshore Israel and the Aphrodite field offshore Cyprus and with LNG export ambitions, reported solid earnings and steady exports to regional markets amid advances in several projects.

Israel has suspended production at the Tamar natural gas field supplying Israel, Jordan and Egypt offshore the East Mediterranean coast and not far from the Gaza strip after the terrorist attacks against Israeli civilians over the weekend that have spread regional instability and affected natural gas prices more than crude oil prices.

NewMed Energy, the Israeli natural gas company and LNG project developer in the East Mediterranean, has taken a positive final investment decision for a third natural gas pipeline for production wells in the Leviathan gas field amid LNG export and domestic supply plans.

Italian energy major Eni, a global participant in LNG projects, said in its World Energy Review 2022 that natural gas prices were up in all markets, soaring 400 percent in Europe 300 percent in Asia and 90 percent in the US, including a marked uptick in the second half.

The 50th anniversary Gastech Exhibition and Conference on LNG, pipeline natural gas and emerging energies entered its third day on Wednesday after serious discussions on the natural gas crisis in Europe, the future of Gazprom's ties with the West and projects to replace Russian gas from regions like the East Mediterranean and Africa.

Chevron Corp., the LNG operator in Australia and Africa, reported a more than four-fold jump in first-quarter earnings of $6.3 billion compared with $1.4Bln in the first three months of 2021 as more revenues came from LNG plants in Australia and Africa.

Egyptian commitment to exporting surplus natural gas from the domestic market as LNG from the plants at Damietta and Idku, east of Alexandria, may be affected in the future by deliveries to former gas markets in Lebanon and Syria via Jordan.

Italian energy company Eni has outlined a project to expand natural gas treatment facilities in Egypt connected to the Western Desert Gas Complex in the port of Alexandria to further tap the region's gas reserves.

The expansion of natural gas facilities coincided with an agreement with the Government of Egypt, the Egyptian General Petroleum Corp.(EGPC) and Russian oil company Lukoil for the merger of the concessions of Meleiha and Meleiha Deep, in Egypt's Western Desert, and their extension to 2036.

The extension of the Meleiha concession time also has the possibility of reaching out to a further timeline of 2041.

“The agreement, which marks another important result for Eni in the prolific basin of the Egyptian Western Desert, will unlock, through enhanced contractual terms, the area’s considerable resources,” explained Eni.

“The company will leverage the skills of local contractors already involved in the implementation of important projects in Egypt, including the fast-track development of the giant Zohr gas field,” said Eni.

Before the bringing on stream of the Zohr field in the East Mediterranean in 2017, Egypt had been forced to import LNG from 2015 in two floating storage and regasification units deployed at Ain Sokhna in the Gulf of Suez.

The Egyptians halted LNG imports two years ago and have now started regular exports of LNG from their two liquefaction facilities at Idku and Damietta, east of the port of Alexandria.

The Idku LNG export plant has been on stream again since 2017 under the operatorship of Royal Dutch Shell, which acquired original operator BG Group.

The Damietta facility only re-started operations and exports in February 2021.

With Damietta back on stream, Egypt added 4.5 million tonnes per annum of LNG output to its export volumes now totalling 12.5 MTPA.

The Milan-based major has completed a high-resolution 3D seismic acquisition of the Meleiha blocks ahead of intensive exploration and a development drilling campaign in the Meleiha and Meleiha Deep concessions.

The concessions are operated by Agiba, the 50-50 joint venture between Eni and EGPC through an Eni subsidiary that holds a 76 percent interest in the concessions, while Lukoil holds a 24 percent interest. 

Delek Group, the Israeli company with natural gas assets in the East Mediterranean contributing to the region’s LNG and pipeline mix with supplies to Egypt and Jordan, returned to a first-quarter profit from a previous loss due to higher Leviathan gas field revenues.

Egypt plans to construct a $7.5-billion petrochemicals, energy and bunkering complex at Ain Sokhna in the Gulf of Suex where it previously imported LNG during the era of natural gas shortages before the Zohr gas field and other discoveries were made in the Eastern Mediterranean and the Nile Basin.

The Egyptian government said the facility would be constructed on a 3.65 million square metres site and is the latest instalment in the country’s comeback story as an LNG exporter and now with plans to build its East Med energy hub.

The deal to develop the complex is between the Red Sea National Refining and Petrochemicals Company and the Suez Canal Economic Zone's development company. They aim to produce value-added petroleum products to fill Egypt's domestic needs and enable exports.

“The products include polyethylene, polypropylene, polyester, bunkering fuel and other petroleum and chemical products,” said a statement.

Egypt’s gas crisis during the “Arab Spring” social upheavals in North Africa and the Middle East in 2014 led to the diversion of natural gas supplies away from LNG production to meet growing domestic demand and to avoid power cuts.

The Gulf of Suez is a main transit point for global shipping and the development of bunkering will be part of the business.

Before the bringing on stream of the Zohr field in the East Med in 2017, Egypt had been forced to import LNG from 2015 in two floating storage and regasification units deployed at Ain Sokhna.

The Egyptians halted LNG imports two years ago and have now started regular exports of LNG from their two liquefaction facilities at Idku and Damietta, east of the port of Alexandria.

The Idku LNG export plant has been on stream again since 2017 under the operatorship of Royal Dutch Shell, which acquired original operator BG Group.

The Damietta facility only re-started operations and exports in February 2021.

With Damietta back on stream, Egypt added 4.5 million tonnes per annum of LNG output to its export volumes now totalling 12.5 MTPA.

The move forward for Damietta came after the resolution of  a long-standing dispute between the shareholders over contracts because of the closure.

Naturgy Energy, the Spain-based European utility, agreed to sell its stake in the Damietta plant and to rescind its Egyptian gas contracts on departing from the Unión Fenosa Gas (UFG) joint venture.

Naturgy’s UFG partners, Italian Eni company and the Egyptian Natural Gas Holding Company (Egas), reached the agreement under which Naturgy received a series of payments adding up to US$600 million.

Eni has taken over the contract for the purchase of natural gas for the LNG plant and receives corresponding liquefaction rights.